Derivative Instruments and Hedging Activities (Tables)
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6 Months Ended |
Jun. 30, 2013
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Derivative Instruments and Hedging Activities Disclosure [Abstract] |
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Schedule of Derivative Instruments in Statement of Financial Position, Fair Value |
The following table reflects the fair values of the Company’s derivative instruments for the periods presented (none of which were designated as hedging instruments under ASC 815):
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Balance Sheet Presentation |
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Asset Fair Value |
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Liability Fair Value |
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Net Derivative Fair Value |
Commodity |
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Classification |
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Line Description |
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06/30/13 |
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12/31/12 |
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06/30/13 |
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12/31/12 |
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06/30/13 |
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12/31/12 |
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Natural gas |
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Current |
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Fair market value of derivatives |
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$ |
— |
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$ |
— |
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$ |
(106 |
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$ |
(125 |
) |
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$ |
(106 |
) |
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$ |
(125 |
) |
Natural gas |
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Non-current |
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Other long-term liabilities |
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— |
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— |
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(38 |
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(116 |
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(38 |
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(116 |
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Crude oil |
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Current |
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Fair market value of derivatives |
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1,647 |
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1,674 |
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— |
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— |
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1,647 |
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1,674 |
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Crude oil |
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Non-current |
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Other long-term assets |
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428 |
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250 |
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— |
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— |
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428 |
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250 |
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Totals |
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$ |
2,075 |
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$ |
1,924 |
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$ |
(144 |
) |
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$ |
(241 |
) |
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$ |
1,931 |
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$ |
1,683 |
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Offsetting Assets and Liabilities |
The following presents the impact of this presentation to the Company’s recognized assets and liabilities at June 30, 2013:
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Presented without |
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As Presented with |
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Effects of Netting |
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Effects of Netting |
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Effects of Netting |
Current assets: Fair value of hedging contracts |
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$ |
2,330 |
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$ |
(683 |
) |
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$ |
1,647 |
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Long-term assets: Fair value of hedging contracts |
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852 |
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(424 |
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428 |
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Current liabilities: Fair value of hedging contracts |
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(789 |
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683 |
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(106 |
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Long-term liabilities: Fair value of hedging contracts |
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(462 |
) |
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424 |
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(38 |
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Schedule of Derivatives Not Designated as Hedging Instruments, Statements of Financial Performance |
For the periods indicated, the Company recorded the following related to its derivative instruments that were not designated as accounting hedges:
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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2013 |
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2012 |
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2013 |
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2012 |
Natural gas derivatives |
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Realized gain (loss), net |
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$ |
(156 |
) |
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$ |
— |
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$ |
(107 |
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$ |
— |
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Unrealized gain (loss), net |
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485 |
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(331 |
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97 |
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(331 |
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Sub-total gain (loss), net |
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$ |
329 |
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$ |
(331 |
) |
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$ |
(10 |
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$ |
(331 |
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Crude oil derivatives |
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Realized gain, net |
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$ |
849 |
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$ |
— |
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$ |
1,422 |
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$ |
— |
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Unrealized gain, net |
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803 |
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3,836 |
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151 |
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3,906 |
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Sub-total gain, net |
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$ |
1,652 |
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$ |
3,836 |
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$ |
1,573 |
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$ |
3,906 |
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Total gain on derivative instruments, net |
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$ |
1,981 |
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$ |
3,505 |
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$ |
1,563 |
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$ |
3,575 |
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Schedule of Derivatives Designated as Hedging Instruments. Gain (Loss) in Statement of Financial Performance |
The tables below present the effect of the Company’s derivative financial instruments on the consolidated statements of operations as an increase (decrease) to crude oil revenues for the effective portion and as an increase (decrease) to other (income) expense for the ineffective portion and amounts excluded from effectiveness testing:
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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2013 |
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2012 |
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2013 |
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2012 |
Amount of gain reclassified from OCI into income (effective portion) |
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$ |
— |
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$ |
512 |
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$ |
— |
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$ |
512 |
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Amount of gain recognized in income (ineffective portion and amount excluded from effectiveness testing) |
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— |
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92 |
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— |
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322 |
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Schedule of Outstanding Oil and Natural Gas Derivative Contracts |
Subsequent Event: Derivative contracts executed subsequent to June 30, 2013 include the following:
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Commodity |
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Instrument |
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Average Notional Volumes per Month |
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Quantity Type |
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Put/Call Price |
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Fixed-Price Swap |
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Period |
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Designation under ASC 815 |
Crude oil |
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Swap |
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18 |
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Bbls |
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n/a |
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$ |
102.08 |
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Sep13 - Dec13 |
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Not Designated |
Crude oil |
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Swap |
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9 |
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Bbls |
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n/a |
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$ |
94.58 |
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Jan14 - Dec14 |
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Not Designated |
In the first quarter of 2013, the Company monetized the remaining portion (covering the period Feb13-Dec13) of its 2013 crude oil collar positions of 40 Bbls per month. The proceeds from this transaction, combined with the proceeds from the sale of the below listed put for 30 Bbls per month, were used to finance the uplift in the crude oil swap for the period Feb13-Dec13.
Listed in the table below are the outstanding crude oil and natural gas derivative contracts as of June 30, 2013:
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Commodity |
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Instrument |
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Average Notional Volumes per Month |
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Quantity Type |
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Put/Call Price |
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Fixed-Price Swap |
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Period |
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Designation under ASC 815 |
Natural gas |
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Swap |
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91 |
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MMbtu |
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n/a |
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$ |
3.52 |
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Jul13 - Dec13 |
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Not Designated |
Natural gas |
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Put Option |
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91 |
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MMbtu |
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$ |
3.00 |
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n/a |
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Jul13 - Dec13 |
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Not Designated |
Crude oil |
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Swap |
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40 |
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Bbls |
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n/a |
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$ |
101.30 |
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Jul13 - Dec13 |
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Not Designated |
Natural gas |
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Call Option |
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38 |
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MMbtu |
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$ |
4.75 |
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n/a |
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Jan14 - Dec14 |
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Not Designated |
Crude oil |
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Swap |
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30 |
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Bbls |
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n/a |
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$ |
93.35 |
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Jan14 - Dec14 |
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Not Designated |
Crude oil |
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Put Option |
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30 |
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Bbls |
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$ |
70.00 |
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n/a |
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Jan14 - Dec14 |
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Not Designated |
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